Didi posts $6.4b loss in Q3 as China's regulatory clampdown hits business

TOKYO • Didi Global has reported a massive US$4.7 billion (S$6.4 billion) net loss for the third quarter ended September as it navigates towards delisting its shares in the United States and offering them up in Hong Kong.

The ride-hailing giant has been the focus of a broader Beijing crackdown on big tech. Regulators demanded that the firm withdraw from trading in the US over fears that its vast troves of data could be exposed to foreign powers.

The company yesterday reported US$6.6 billion in revenue in its unaudited third-quarter results, down from US$7.6 billion in the previous three months.

Didi's app was removed from Chinese app stores in early July, shortly after its initial public offering (IPO) in the US in June, when China's cyber-security regulator said an investigation had uncovered problems with the way it collects and uses personal data.

The company's spending may have risen during the quarter in order to comply with the increased scrutiny from Beijing around the way it governs its drivers and data. Worker-rights protections for drivers were formalised into a set of guidelines from Chinese regulators last month.

Didi reiterated its plan to list on the Hong Kong Stock Exchange and ensure that its American depositary shares (ADS) can be swapped for "freely tradable shares of the company on another internationally recognised stock exchange at the election of ADS holders". Didi said it will organise a shareholder meeting and vote on the matter.

Mr Daniel Zhang, the chief executive officer of Chinese e-commerce giant Alibaba Group, who had served as a director on Didi's board since 2018, has resigned.

The company, co-founded in 2012 by former Alibaba employee Cheng Wei, was the dominant ride-hailing company in China, but now faces stiff competition from ride-hailing services by carmakers Geely and SAIC Motor.

Didi shares - which soared in the IPO, valuing the firm at US$80 billion and marking the biggest US listing by a Chinese firm since 2014 - have declined 65 per cent.

Revenue from its international operations nearly doubled to 966 million yuan (S$205 million) in the quarter, said Didi, which is expanding its presence in Europe and South America.

BLOOMBERG, REUTERS